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India commits $4.2 billion to buy farm land from Ethiopia

November 28th, 2009 | | 3 Comments

Didn't the dumb regime in Ethiopia say that 6 million people are currently facing starvation because of rain shortage? If so, how are the Indians and Saudis going to grow crops on the land they are buying from the regime — the same land that we are told cannot produce food for Ethiopians?

How about the question of sovereignty? These land leases and international agreements that are signed by the illegitimate regime inEthiopia that has no mandate to govern are serious threats to Ethiopia's long term interest. In early last century, the British signed away the Nile River to Egypt without Ethiopia's knowledge and now if Ethiopia tries to adjust or cancel the treaty, it will face war, as the government of Egypt warned recently. When the Woyanne regime goes away, if a new regime tries to adjust or terminate all these ill-advised land lease treaties,Ethiopia may face war from the 1-billion-strong India, not to mention Saudi Arabia, Korea and the other countries that are taking over Ethiopia's land at "bargain-basement prices." Woyanne's land giveaway in such a manner is the worst kind of treason.

Washington Post reports the following on the scramble for Ethiopia's land.

Ethiopia — In recent months, the Ethiopian regime began marketing abroad one of the hottest commodities in an increasingly crowded and hungry world: farmland.

"Why attractive?" reads one glossy poster with photos of green fields and a map outlining swathes of the country available at bargain-basement prices. "Vast, fertile, irrigable land at low rent. Abundant water resources. Cheap labour. Warmest hospitality."

This impoverished and chronically food-insecure nation is fast becoming one of the world's leading destinations for the booming business of land leasing, by which relatively rich countries and investment firms are securing 40-to-99-year contracts to farm vast tracts of land.

Governments across South-East Asia, Latin America and especially Africa are trying to attract this new breed of investors, creating land-leasing agencies and land catalogues to display their offerings of earth.

In Africa alone, experts estimate more than 20 million hectares have been leased in the past two years.

The trend is driven in part by last year's global food crisis. Wealthy countries are shoring up their food supplies by growing staple crops abroad. The desert kingdom of Saudi Arabia, for instance, is shifting wheat production to Africa. The government of India, where land is crowded and overfarmed, is offering incentives to companies to carve out mega-farms across the continent.

Increasingly, though, purely profit-seeking companies are snatching up land, making a simple, grim, calculation. As one Saudi-backed businessman here put it: "The population of the world is increasing dramatically, so land and food supplies will be short, demand will be higher and prices will rise."

The scale and pace of the land scramble have alarmed policymakers and others concerned about the implications for food security in countries such asEthiopia, where officials recently appealed for food aid for about 6 million people as drought devastates East Africa.

A code of conduct to govern land deals was discussed on the sidelines of last week's UN Food and Agriculture Organisation food security summit in Rome. "These contracts are pretty thin; no safeguards are being introduced," David Hallam, a deputy director at the FAO, said. "You see statements from ministers where they're basically promising everything with no controls, no conditions."

The harshest critics conjure images of poor Africans starving as food is hauled off to rich countries. Some express concern that decades of industrial farming will leave good land spoiled even as local populations surge. And sceptics also say the political contexts cannot be ignored.

"We don't trust this government," said Merera Gudina, a leading opposition figure who accuses the Ethiopian Prime Minister, Meles Zenawi, of using the land policy to hold on to power. "We are afraid this government is buying diplomatic support by giving away land."

But many experts are hopeful, saying that big agribusiness could feed millions by industrialising agriculture in countries such asEthiopia, where about 80 per cent of its 75 million people are farmers who plow their fields with oxen.

"If these deals are negotiated well, I tell you, it will change the dynamics of the food economy in this country," said Mafa Chipeta, the FAO's representative inEthiopia, dismissing the worst-case scenarios. "I can't believe Ethiopia or any other government would allow their country to be used like an empty womb. The human spirit would not allow it."

Few countries have embraced the trend as zealously as Ethiopia, where hard-baked eastern deserts fade into spectacularly lush and green western valleys fed by the Blue Nile. Only a quarter of the country's estimated 70 million fertile hectares is being farmed.

Desperate for foreign currency, the government of former Marxist rebels who once proclaimed "land to the tiller!" has set aside more than 2.5 million hectares for agribusiness. Lured with 40-year leases and tax holidays, investors are going on farm shopping sprees, crisscrossing the country to pick out swathes of Ethiopian soil.

"There's no crop that doesn't grow in Ethiopia," said Esayas Kebede, who works for a government agribusiness agency, adding that too many requirements on investors might scare them off. "Everybody is coming."

Especially Indian companies, which have committed $US4.2 billion ($4.6 billion).

Anand Seth, director general of the Federation of Indian Export Organisations, described Africa as "the next big thing" in investment opportunities and markets.

As he stood on a hill overlooking 12,000 hectares of rich, black soil, Hanumantha Rao, chief general manager of the Indian company Karuturi Agro Products, agreed. So far, he said, the Ethiopian Government has imposed few requirements on his company. "From here, you can see the past and the future of Ethiopian agriculture."

From there – a farm just west of Addis Ababa – it was possible to see a river designated for irrigating cornfields and rice paddies; it is no longer open for locals to water their cows.

Several shiny green tractors bounced across the field where teff, the local grain, once grew. Hundreds of Ethiopian workers, overseen by Indian supervisors, were bent over rows of corn stalks, cutting weeds tangled around them with small blades. Many of the workers were children.

The day rate: 8 birr – about 70 cents.

"The people are very happy," Rao said. "We have no problems with them."

As a worker spoke to one of his supervisors, he whispered that the company had refused to sign a wage contract and had failed to deliver promised water and power to nearby villages.

Supervisors treat them cruelly, he said, and most workers were just biding time until they could go work for a Chinese construction company rumoured to pay $2 to $4 a day.

"We are not happy," said the man, a farmer-turned-tractor driver who did not give his name because he feared being fired.

"I'm a machine operator and I make 800 birr [about $65] a month. This is the most terrible pay."

Rao said he had trained about 60 Ethiopians to drive tractors; others would learn to run shellers and how to fertilise and irrigate land. If things work as they should, he said, Ethiopians will adopt the modern techniques in their own farms.

Along a muddy road leading to Karuturi farm, people said they were hopeful that might happen. But they were not sure how. Ethiopians cannot own land, instead holding "use certificates" for their tiny plots, making it difficult to get loans, or to sell or increase holdings.

"We think they might be beneficial to us in the future," said Yadeta Fininsa, referring to the new companies coming to town. "But so far we have not benefited anything."